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Odds favor gaming ads after latest court ruling

An appellate court decision against federal curbs on broadcast ads for gambling could open the door to more spending on such advertising as well as make it harder to restrict advertising in general, lawyers say. The decision may also supply fresh ammunition for an effort in New Orleans to eliminate the same federal ad limits.

RULES HAD BARRED GAMING ADS

The decision by the 9th U.S. Circuit Court of Appeals pertains to restrictions imposed by the U.S. Department of Justice and the Federal Communications Commission, but not state laws. The federal government appealed after a U.S. District Court scrapped the ad limits, which prevented casinos from advertising their games.

The three-judge appellate court said that for ad curbs to pass constitutional muster, the curbs had to clearly advance government aims. Because federal law allows Native American groups to air casino ads, and state and non-profit groups to air lottery ads, "it is impossible for [the government] materially to discourage public participation."

The Justice Department and FCC declined to say whether they would appeal the decision, but the lawyer who filed the case for two Nevada TV stations said the federal government would likely conclude chances for a successful appeal are not good. The decision "very effectively disposes of all the Justice Department's arguments," attorney Janet Rogers said.

Ms. Rogers also said a further appeal of the decision would risk prompting the U.S. Supreme Court to widen advertiser rights just before the court considers the Food & Drug Administration's tobacco advertising curbs.

In the case filed by the Greater New Orleans Broadcasters Association, the Supreme Court last year told the 5th U.S. Circuit Court of Appeals to re-examine, in light of the high court's 44 Liquormart v. Rhode Island decision, the appellate court's move to uphold the federal limits.

The May 1996 Liquormart decision gave advertisers broad First Amendment speech rights.

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In the Nevada case, casino spots have aired for nearly four years following the U.S. District Court's overturning of the federal restrictions. New Orleans broadcasters, who lost their District Court battle and have been unable to run ads, petitioned the FCC in the wake of the Nevada action to set aside enforcement of its rule.

Dan Jaffe, exec VP at the Association of National Advertisers, said the Nevada decision further narrows the definition of legal ad restrictions.

"The cases are starting to create a very narrow eye of the needle that the government must pass through in its advertising regulations," he said.

"If there are too many exceptions to the [ad] rule, it does not directly advance the" government's aim, Mr. Jaffe said.